Say you’ve done your research and found an available mortgage loan with a reasonable loan term, low interest rate, and affordable down payment. Now you need to meet with the mortgage lender to complete your loan application and find out if you qualify. As you prepare for your first meeting with the mortgage lender, there are many things you can do to help the process go smoothly.
Have a Stable Income Source
The first and most important thing you should do is to wait until you’re a well-qualified candidate before meeting with any mortgage lenders. Have you been earning a steady (or increasing) income at the same job for several years? Stable employment makes you an attractive borrower because it shows that you’re financially secure. It also indicates to mortgage lenders that you intend to stay in the area (in the home) and be as dedicated with your mortgage payments as you are with your job.
Know What You Can Afford
Are you looking at a home that costs over three times your annual income? A major cause of the financial recession and housing crisis was that mortgage lenders were issuing large loans to homebuyers who could not actually afford them. However, once numerous homeowners began to default on their loans, an increase in financial prudence and government scrutiny followed. Due to the uncertainty of the market, mortgage lenders are now much stricter with their requirements and will want to ensure that the property you’re looking at is something you really can afford.
Show a Solid Credit History
Another thing you should do prior to meeting with a mortgage lender is to check your credit report and credit score. Obtain a copy of your credit report and scan it for any inaccuracies or negative information. If you are behind on credit card payments, student loan payments, or utilities bills, make sure to clear up those debts before presenting yourself to the mortgage lender. Some of those companies may actually be able to work in your favor by providing the mortgage lender with recommendations and proof of your ability to make regular payments. This can be especially useful if you’re a first-time homebuyer or young borrower with a credit history that only goes back a few years.
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If you are unsure about the steadiness of your income or the soundness of your credit, you may also consider finding a co-signer for your loan. If you have a family member who’s in a stronger financial position than you, setting up a co-signer will count in your favor when the mortgage lender considers your application. [See related article “How to Get Your Mortgage Application Approved”]